Crop subsidies found to help largest farms most

AGRICULTURE

Published 4:00 am, Wednesday, May 5, 2010

Photo: Michael Macor, The Chronicle

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farmbill_141_mac.jpg Bowles in one of his fields full of cotton plants that are near ready for harvest. The company has 6,000 acres of cotton. Philip Bowles is President of Bowles Farming Company in Los Banos. Congress is working on a farm bill that will have a dramatic impact on the way farming is conducted in California. One of the issues at hand is subsidies for California farmers. Photographed in, Los Banos, Ca, on 9/11/07. Photo by: Michael Macor/ The Chronicle less

farmbill_141_mac.jpg Bowles in one of his fields full of cotton plants that are near ready for harvest. The company has 6,000 acres of cotton. Philip Bowles is President of Bowles Farming Company in Los ... more

Photo: Michael Macor, The Chronicle

Crop subsidies found to help largest farms most

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Farm program reforms touted by congressional Democrats in 2008 were supposed to help small farmers stay competitive by reducing payments to giant farms. But that has not happened, according to figures released Tuesday.

Millions of dollars in federal subsidies continued to flow to large California growers of select crops such as rice and cotton last year, according to the Environmental Working Group, a consumer safety group and an opponent of crop subsidies whose database of government payments shows how much farmers were paid.

SJR Farming of Los Banos (Merced County) received more than $2 million last year, making it the fourth most heavily subsidized farm in the nation.

California's second-largest recipient, at $1.27 million, was Bowles Farming Co., a family operation also in Los Banos established by cattle baron Henry Miller and managed by his great-great-grandson, Philip Bowles of San Francisco, who strongly opposes the subsidies.

Like most California cotton growers, Bowles grows the branded Supima and Acala cotton and contends the government payments give an unfair competitive advantage to inferior cotton and less-efficient competitors.

He said the database is misleading because the subsidies are built into the cotton price he receives at the mill. "That's the way the buyer of the cotton gets paid," he said. "I leave it to somebody else to explain why that's a good idea."

Unprofitable farming

But Bowles said growers do not "go to the mailbox once a year and find this great big check and go off and buy a yacht with it. If that check had been zero, I would have gotten more money. And that makes me crazy."

Cotton subsidies have glutted the market by encouraging farmers, many of them in the Mississippi Delta, to grow the crop even when it is unprofitable. That lowers world market prices for everyone, from impoverished farmers in Mali who pick their crops by hand to multimillion-dollar operations in the San Joaquin Valley.

"The government has decided in their wisdom to encourage production of crops the market doesn't want," Bowles said. "It must make political sense because it certainly doesn't make economic sense."

The 2009 payments remained concentrated on the largest farms, despite new rules in the 2008 farm bill that were supposed to limit the division of farms into various entities to increase payments. Economists blame the payments for hastening the economic hardships of smaller farms by giving financial leverage to larger neighbors to buy them out.

"The last farm bill was much ado about very little," said Chuck Hassebrook, executive director of the Center for Rural Affairs in Lyons, Neb. The changes only affected unmarried farmers who could not split their payments with a spouse.

"We called it the Norwegian bachelor farmer provision," he said. "At any rate, it's not working."

$408 million for California

The top 10 percent of California's subsidy recipients received 48 percent of the payments. Nationally, the top 10 percent of farms received 61 percent.

Most California farmers, who grow mainly fruits and vegetables, do not get direct subsidies from the Depression-era programs, which remain largely targeted at grains, cotton, dairy and a handful of smaller crops. Still, the state's commodity farmers collected $408 million, the fourth-highest in the nation. Texas ranked first at $866 million, followed by Iowa at $512 million and Illinois at $431 million.

Disaster payments ranked just behind cotton and rice as the third-largest payment category to the state's farmers. Subsidized crop insurance now rivals traditional subsidies, with the federal government spending $8 billion on crop insurance nationwide last year, compared with $9.3 billion in commodity payments.

At a hearing by the House Agriculture Committee in Fresno on Monday, California farmers told Chairman Rep. Collin Peterson, D-Minn., that federal crop insurance is unnecessary in California, where crops are irrigated.

Facing budget constraints, Peterson is conducting hearings around the country asking farmers what changes they want for the next five-year reauthorization of the farm bill in 2012.

Seeking responsible farming

Proponents of small, organic and local farms blame commodity programs for subsidizing industrial agriculture. Even locavore skeptic James McWilliams, an associate professor of history at Texas State University at San Marcos, argued that farm programs shape the face of agriculture.

"A lot of this is top down," McWilliams said. "The fact that so much of the way we produce food in this country is dictated by farm bill incentives or disincentives, on the one hand we can condemn that, on the other we can see it as a great opportunity. Because if we can somehow write an intelligent farm bill that's attuned to the goals of public health and environmental responsibility, we can certainly create a set of incentives that steer agriculture in a more responsible direction."

Tim Johnson, president of the California Rice Commission, said the rice program is working well because payments have dropped from $1.2 billion to $400 million nationally as rice prices have increased.

"The average California rice farm has just over 350 acres, or say you're farming with a brother or your wife, the average size is maybe 700 acres," Johnson said. "Most all of them are family farms, even those that are incorporated."